BB opens path for PayPal and Payoneer transactions

Bangladesh Bank on Wednesday issued a circular introducing a “bank-mediated framework” aimed at expanding digital financial inclusion and service access, allowing foreign currency transactions with global e-commerce and international service providers such as PayPal and Payoneer through newly introduced Digital Value Accounts (DVA).

The circular was issued by the central bank’s Foreign Exchange Policy Department. Under the new system, banks will be able to jointly offer international digital payment facilities with foreign transaction service providers, digital platforms, online payment gateway service providers and other lawful transaction solution providers. The directive refers to them as cross-border digital payment service providers.

Bangladesh Bank said the initiative has been taken to facilitate international trade in services, increase digital financial inclusion and modernise the country’s transaction framework.

Under the directive, banks may assist customers in opening Digital Value Accounts, digital wallets or stored-value accounts in their names. However, these personal accounts cannot be operated directly or independently. To ensure security, each account must be linked to a master DVA or settlement account maintained under the relevant bank.

The central bank instructed banks to maintain real-time monitoring in their systems and keep a parallel ledger to ensure transaction transparency. Any unused funds must remain under the bank’s direct control and must be refunded or adjusted in line with regulations.

The new framework will allow individuals, businesses and freelancers to conduct foreign currency transactions. The digital wallet facility may be used for foreign exchange spending under travel quotas for personal, medical or official purposes.

For small international purchases or fee payments, transactions of up to $300 per transaction will be allowed. The facility may also be used, based on genuine need, for membership fees, IT-related expenses, visa processing fees and online hotel bookings.

The facility may be offered against Export Retention Quota (ERQ) and Resident Foreign Currency Deposit (RFCD) accounts. For institutions holding ERQ accounts, up to three top officials will be allowed to use DVA accounts for business expenses.

Freelancers and e-commerce businesses will also be able to repatriate their earnings more easily under the new system.

Foreign nationals or tourists visiting Bangladesh will also be able to use this settlement facility to make payments at local merchant points. Bangladesh Bank said the initiative is an important step toward bringing digital payment channels into the formal financial system.

Previously, banks were largely limited to bringing in inward remittances through gateway-based online payments. People concerned said the initiative could encourage global payment platforms such as PayPal and Stripe to enter the Bangladesh market in the areas of freelancing, e-commerce and trade in services.